Nursing home owners to rally for "granny tax"

Nursing home owners to rally for feeSome facilities are at risk without the 'granny tax,' operators contend

POLLY ROSS HUGHES, Copyright 2005 Houston Chronicle

Published 5:30 am, Friday, June 17, 2005

AUSTIN - Nursing home owners say they'll converge outside the Governor's Mansion and Capitol next week to protest the legislative death of a "quality assurance" fee that Gov. Rick Perry calls a "granny tax."

The $7-per-day bed fee, which would have boosted reimbursements for nursing homes serving Medicaid patients by nearly $1 billion, died in the Texas Senate late in the session with strong opposition from Perry.

The fee would have generated $440 million in payments from nursing homes, which the state would use to draw an additional $525 million in federal Medicaid money. All of the money would flow back for Medicaid patients only.

The controversy revolves around 2,200 privately paying nursing home residents whose bills would increase, even though they'd see nothing in return.

Simultaneous rallies

Nursing home officials are planning simultaneous rallies, which one organizer said might draw 200 protesters, Thursday between 10 a.m. and noon at the mansion and Capitol.

"We're asking the governor why he did this, because it hurt nearly every nursing home in Texas. Why does he hate old people in Texas?" said Bill Powers, president of Daybreak Venture LLP, which operates 70 nursing homes in Texas.

Perry first opposed the fee in 2001 as an unfair tax on the 30 percent of nursing home patients in Texas who have privately paid long-term care insurance, said spokeswoman Kathy Walt.

"This 'granny tax' would have placed about $200 a month additional fee on nursing home beds, including on nursing homes that don't take any Medicaid patients at all," she said. "Those patients would not have seen any benefit from the increased cost on their nursing home care."

Walt also said the nursing home budget slightly increased, from $3.6 billion in 2004-05 to $3.7 billion in 2006-07, but the nursing homes say their funding is woefully inadequate.

Reimbursement boost

He said the fee would have raised reimbursement rates between 13 percent and 15 percent.

And, while it is true that nursing homes with private-pay patients would not have gotten the money back, those that serve 70 percent of all nursing home patients on Medicaid would have, he said, adding there are only about 25 homes that do not serve Medicaid patients.

"It was not going to cost the state a dime, but it would save us probably from going bankrupt," said Jim Brown administrator of Willis Nursing and Rehabilitation, part of Daybreak Venture.

Within days after lawmakers killed the quality assurance fee, nursing home administrators flooded the mailboxes of Perry, Lt. Gov. David Dewhurst and Senate Finance Committee Chairman Steve Ogden, R-College Station, with thousands of letters pleading for reconsideration.

"Your decision to eliminate the nursing home quality assurance fee delivered a devastating blow to the patients receiving care in Texas nursing homes," said one typical form letter, of which 1,054 copies were sent to Perry alone.

Toll on nursing homes

The letter predicted dire results if funding isn't found, including a decline in patient care, nursing home bankruptcies and closures.

Perry's office sent a letter in response saying the governor considers nursing homes a "top priority" but taxing nursing homes that wouldn't get the money back is "wrong.

"The whole concept of a fee is that the person who pays it receives a benefit in exchange," it said.

Tim Graves, president of the Texas Healthcare Association, called the demise of the quality assurance fee a "double whammy" because budget writers reduced the nursing home budget by $92 million in anticipation that the fee would pass.

"It was too late to adjust the budget. We're stuck," he said. "You can imagine. Our nursing home providers are very upset."

She said there is flexibility to make up the $92 million from elsewhere, even if it requires action by the Legislative Budget Board.

polly.hughes@chron.com

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